A Bank of Greece (BoG) audit of non-systemic Attica Bank has reportedly revealed 128 million euros in loans to one businessman alone, Christos Kalogritsas, whose son is listed as the principal owner of a neophyte company that recently won one of four television broadcast licenses.
The report comes as at least one obstacle bedeviling Attica Bank -- which is controlled by the engineers and contractors’ fund, TSMEDE -- fell by the wayside, as the fund's leadership apparently relented in its opposition to the appointment of Theodoros Pantalakis as Attica Bank's new CEO. The fund’s previous candidates for Attica’s board of directors were rejected by the BoG as unsatisfactory, with Pantalakis serving as the BoG’s replacement.
Had the appointment been blocked by TSMEDE, which contributed millions of euros of its reserves in a recent recapitalization of non-systemic Attica Bank, then Greece’s central bank was reportedly considering the appointment of a temporary commissioner. That would mean a temporary take over of Attica Bank by the central bank.
Trading of Attica Bank’s shares at the Athens Stock Exchange (ASE) were suspended last week, and the BoG prevented the allocation of new loans until a board of directors is approved.
The entire process for finally regulating Greece’s broadcast sector has increasingly gone awry for the leftist Tsipras government.
In a press release issued by Attica Bank on Monday, it said Pantalakis’ appointment was unanimously approved by the current board, with a general assembly expected to ratify the placement on Tuesday.
Sources at the BoG over the past few days had referred to an unwavering stance in dealing with Attica Bank, saying Pantalakis was either going to lead the bank as its CEO or as an appointed commissioner, with supervision passing directly to the BoG.
The situation was such that BoG Gov. Yannis Stournaras postponed his trip to Frankfurt by one day.
A major restructuring is now in store for Attica Bank, which has found itself in the national limelight and under intense scrutiny over the past week.
The loans to Kalogritsas, standing at 127.4 million, of which a good portion was allocated in 2015, are expected to come under even closer scrutiny.
Among others, Attica Bank issued a letter of guarantee to the company owned by Kalogritsas’ son, Yannis, with which he made a successful bid for one of only four national television broadcast licenses auctioned off by the leftist government. Collateral for the bank guarantee was worthless grazing land on a remote part of an Ionian island, transferred as a grant by a friend of the younger Kalogritsas and using a power of attorney document listing a woman deceased since 2011.
Kalogritsas’ holding company came away with the second license, at a cost of 52.6 million euros, and after no less than 78 electronic rounds of bidding.
The entire process has been vilified by the political opposition as well as broadcasters, journalist groups and others.
In terms of the loans extended to the Kalogritsas family, which has long been active in the domestic construction sector, and especially in implementing state contracts and concessions, a report by the Athens-based Alpha TV – one of the six broadcasters that did not win a license – said the BoG and SSM-assisted audit revealed that Kalogritsas received 55 million euros between 2011 and 2014. In 2015 he received 50 million euros, with another 22.6 million coming in 2016, of which 15 million came shortly before the electronic auction for the broadcast licenses.
The BoG-SSM audit also reportedly cites “irregularities” in the loan allocation, including insufficient guarantees and collateral.
The entire audit report will be sent to a relevant prosecutor.
The fact that the SSM was involved in the audit also means that the European Central Bank (ECB) has a direct understanding of the Attica Bank dealings over the past years.
